Question 1

What is a trading expectancy calculator?

Accepted Answer

It computes the average dollar amount you make per trade given your win rate, average win size and average loss size — the single most important stat for validating a trading system.

Question 2

How is expectancy calculated?

Accepted Answer

Expectancy = (Win rate × Avg win) − (Loss rate × Avg loss). Result is expected $ per trade; multiply by trade frequency to get monthly / annual profit.

Question 3

Why does expectancy matter?

Accepted Answer

A system with 30% win rate and 1:5 R:R has huge positive expectancy — even though most trades lose. Expectancy strips emotion out of strategy evaluation.

Question 4

Example calculation

Accepted Answer

Win rate 45%. Avg win $250. Avg loss $100. Expectancy = (0.45 × 250) − (0.55 × 100) = 112.5 − 55 = $57.50 per trade. 40 trades/month = $2,300 expected monthly profit before slippage.

Question 5

Common mistakes to avoid

Accepted Answer

1) Small sample size (< 50 trades). 2) Not tracking trades honestly. 3) Ignoring the standard deviation of R multiples (a positive expectancy with huge variance can still ruin you). 4) Applying results across changing market regimes.

Question 6

Related tools

Accepted Answer

Use with the Kelly Criterion Calculator (optimal sizing given your expectancy), Compound Calculator (project long-term wealth) and Drawdown Calculator (understand pain of variance).

Trading Expectancy Calculator

The formula

Frequently asked questions

Related calculators